How the PM showed he was against fuel duty increase

Chancellor George Osborne's plans to raise duty on fuel prices by 3.02 pence per litre at the beginning of August have been subject to a storm of protest from all sectors of the automotive industry.

Then another voice joined the protest – that of the Chancellor’s boss and next door neighbour, Prime Minister David Cameron. The PM’s misgivings about the rise have been eagerly seized upon by those lobbying against the increase. Road Haulage Association Chief Executive Geoff Dunning called it “tremendous news.”

He went on: “Fuel is the one commodity on which the entire population of the UK is, to some extent, dependent. While we see prices fluctuating on almost a daily basis, it is the high level of fuel duty that has proved to be the thorn in the side of the economy. We already pay the highest level of duty in Europe and, at a time when, for many households, literally every penny counts, any increase at this time is unthinkable.”

Dunning said that the barrel price of oil is at its lowest for many months, which will help relieve economic pressure. He continued: “The economy needs all the help it can get to recover quickly and we are [pleased that this is also the PM’s view. Surely the Chancellor is keen to see the same thing?”

No longer a luxury

The apparent division at the head of Government was also commented on by the Petrol Retailers Association, who strongly supported the PM’s concern. The 3.02 ppl rise in duty would, when VAT is added, mean a rise at the pumps of 4.0 ppl, said the PRA – and this at a time when the highly-respected TaxPayers’ Alliance is calling for a duty cut of 5 ppl.

PRA Chairman Brian Madderson commented: “David Cameron knows it is right to scrap this increase while the country struggles with a second recession. The decision to do so would not be a U-turn, but common sense prevailing as the economic outlook. Road fuel is no longer a luxury, but an essential part of everyday life. The planned duty increase will penalise lower income earners, pensioners and the unemployed and will push up inflation.”

Madderson went on: “UK retail fuel prices have decreased significantly over recent weeks and may fall further. The Treasury must not opportunistically press on with the duty rise in the hope it will go unnoticed.” Finally, he hit back about allegations from Ministers and motoring organisations that petrol retailers had been ‘price profiteering’, saying: “It is the Government that would be tax profiteering if this increase is not immediately scrapped.”